The Overlooked Reality of Shareholder Activism in China: Defying Western Expectations
China is known in the West for many things. However, a rules-based market for shareholder activism is not one of them. President Xi Jinping is (in)famous in the West for demanding “that businesses conform to the aims of the Communist Party”.[1] The newly appointed boss of the China Securities Regulatory Commission (CSRC) – China’s equivalent […]
Zhou Chun is an Associate Professor at Guanghua School of Law, Zhang Wei is an Associate Professor at the Yong Pung How School of Law, and Dan W Puchniak is a Professor of Law at Yong Pung How School of Law, Singapore Management University. This post is based on their working paper.
China is known in the West for many things. However, a rules-based market for shareholder activism is not one of them. President Xi Jinping is (in)famous in the West for demanding “that businesses conform to the aims of the Communist Party”.[1] The newly appointed boss of the China Securities Regulatory Commission (CSRC) – China’s equivalent to the US Securities and Exchange Commission (SEC) – has earned the sobriquet “Broker Butcher” for his alleged zealous crackdown on traders in the 2000s. Western media regularly reports on “[b]illionaire tycoons, including Jack Ma, the founder of Alibaba, [being] driven underground or imprisoned after criticizing the government”.[2] This is not exactly an environment in which one would expect to find a vibrant rules-based market for shareholder activism – especially with state owned enterprises as the target of such activism.
And yet, the in-depth empirical and case study evidence in our new ECGI Working Paper – The Overlooked Reality of Shareholder Activism in China: Defying Western Expectations – reveals that shareholder activism in China is thriving. Based on our unique hand collected data, there were nine times as many publicly reported shareholder activist campaigns against listed companies in China in 2023 (27) as in 2008 (3) – with over two-thirds of all the shareholder activist campaigns since 2007 occurring in the last five years (see Table, below).
